German company circumvented sanctions to supply technology to Russia via Slovenia

The investigation found that Kontron, which has offices across the EU, in the UK, and in the US, used its Slovenian subsidiary to export telecommunications technology worth more than €3.5 million to its Russian subsidiary at the end of 2023.

This happened despite several waves of EU sanctions, including the 11th package of sanctions introduced in June 2023, which aimed to restrict the export of advanced technologies and dual-use goods to Russia.

Export documents reviewed by the publication show that 11 shipments were made from Kontron's Slovenian subsidiary to its Russian subsidiary Iskra Technologies between July and November 2023, after the June sanctions came into force.

The exported products included dual-use goods, in particular the SI3000 system, which can track and intercept telecommunications traffic.

The company stated that these deliveries were made under existing permits issued by the Slovenian government and related to contracts already concluded. It also reported that it had stopped all new shipments after June 2023.

“Following the introduction of the 11th package of sanctions, we stopped exporting new goods and only made deliveries under already approved export licenses in accordance with the EU sanctions in force,” the company said.

According to the publication, Kontron had previously announced its withdrawal from Russia. In particular, it condemned the “enormous human suffering” caused by Russia's full-scale invasion of Ukraine and stated that it would no longer invest in Russia.

However, Kontron still has a presence in the Russian market through its subsidiary Iskra Technologies, which was included in the EU sanctions list in December 2024. The year-end report states that Kontron “continues to control Iskra Technologies” through its Slovenian subsidiary, which owns 48.4% of the shares.

When asked by journalists, Kontron did not specify who owns the remaining 51.6% of Iskra's shares, other than that it is a “Russian entity not affiliated with state-owned companies.”

The investigation also shows that since June 2023, Kontron's Slovenian division has made at least 49 deliveries of SI3000 technology and spare parts to Kazakhstan.

In addition, it is noted that in August 2023, Iskra Technologies merged with the Russian company RTSoft, which Kontron called its “sister company.” Since 2016, RTSoft has had a license to work with classified information of the Russian Federation issued by the FSB, although Kontron claims that the license was revoked in April 2022.

Slovenian documents show that as of the end of 2023, Kontron d.o.o. had a loan of €3.546 million to Iskra Technologies, which is due to be repaid in 2026–2027. In 2022, it also wrote off €6.393 million in debts owed by the Russian company.

EU sanctions prohibit providing financial assistance or making funds available to sanctioned entities. Kontron stated that these loans remain active but have been reviewed for compliance with the sanctions.

Source: Ukranian Pravda, Politico